Nearly everyday I hear from a Trust or Will beneficiary that they have been threatened with the No-Contest clause by their Trustee or Executor. In today’s legal world, no-contest clauses are rarely enforceable. And yet, the threat is made. Learn what you have to fear, if anything, about your Trust or Will no-contest clause.
The ever confusing Trust and Will no-contest clause is continually being used and abused in California Trust and Will lawsuits. The irony is that a beneficiary is rarely, if ever, disinherited under a no-contest clause any more because the law is favorably skewed to prevent forfeiture. In other words, no-contest clauses simply do not apply except in the most extreme cases (and your case is not extreme no matter what you think). Not only must you meet the requirements of the Probate Code for a no-contest clause to apply, you must also be acting without probable cause—a nearly impossible standard to meet. If you don’t meet the standard, then you are not in danger of being disinherited regardless of the legal action you file.
But what about a bad Trustee, can he be disinherited under a no-contest clause if he breaches his duties as Trustee? The short answer is no, but why not?
The first rule of no-contest clauses is that you must undertake an action that is specifically listed in the no-contest clause as being a triggering event. More than that, Probate Code section 21310 specifically limits the actions a no-contest clause can affect. Actions that can be used to trigger a no-contest clause are limited to: (1) direct contests of a document (meaning you are trying to overturn a Trust, Will, or Trust or Will amendment), (2) creditors’ claims, and (3) challenging the characterization of property as being either community or separate. Further, a no-contest clause will not apply where someone acts with probable cause of success.
Notice how there is no mention of disinheritance for a bad Trustee? That’s because there no basis to disinherit a bad Trustee just for breaching a duty to the Trust. In fact, I have never seen a no-contest clause that includes a provision that triggers disinheritance if a Trustee/beneficiary breaches his duties as Trustee. But even if a Trust or Will no-contest clause had such a provision, it would be unenforceable because only the items outlined in the code can be enforced for no-contest clause purposes.
So that means a bad Trustee who is also a beneficiary will not be disinherited due to his bad actions as Trustee. But the Trustee is not off the hook for engaging in breaches of Trust. The Trustee can still be held liable for any damage that is caused as a result of a breach of Trust, and those damages can be taken out from the bad Trustee’s share of the Trust estate. Unfortunately, that only occurs when a court orders it. That means the burden is on you to file your lawsuit, prove your case at trial, and get your order surcharging the Trustee for damages.
Personal property can be, well, so personal. The family of late comedy legend Robin Williams is in a heated battle over the personal items Robin Williams left behind. The estate fight pits Robin Williams’ widow, Susan Williams, against his three children from a prior marriage, Zachary, Zelda, and Cody.
While we do not know exactly what personal items they are arguing over, the Trustees of Williams’ Trust claim they have compiled a list of over 900 items on a 23-page spreadsheet. The Trustees claim that they have “final and absolute” powers to decide who gets what, but Susan Williams seems unpleased by their decisions. In court filings made last Friday (August 14, 2015) all sides reported their status to the Court, with the children asking the Court to order Susan Williams to hand over the personal items within seven days.
What may be surprising is that even though the trustee are given “final and absolute” power to decide, that power still must be exercised in good faith. In other words, no Trustee, no matter how broad their powers, has unfettered control over Trust property. This “good faith” standard may be enough for Susan Williams to argue for a greater share of the personal items.
Also at issue is the amount of money that should be set aside to maintain the Williams’ estate, where Susan is allowed to live for the rest of her life. Under the Trust terms, the estate must be maintained at the same standard as the couple enjoyed while Robin Williams was still living. The parties claim to all agree that the Trust needs to have money to provide for maintenance, but the amount required as a set aide is still at issue.
The Trustees of the Robin Williams Trust are asking the Court to dismiss Susan’s petitions because all of the issues have already been addressed, according to the Trustees. But that may not be entirely true from Susan Williams’ perspective. The division of personal property, especially items that occupy Susan Williams’ home, can be a sensitive issue. And the amount of money to safely provide for care on Susan’s home can also be a continuing source of disagreement.
Luckily for Susan Williams, the Probate Court is a court of equity in California, meaning that the Court has a wide amount of discretion to make rulings that benefit all of the beneficiaries in this case.
Check in for more updates on the Williams estate as the case progresses.
Our partner Gian Ducic-Montoya is stepping out to open our newest office in Irvine, located on the corner of Jamboree and MacArthur in the heart of Orange County. Our Orange County office has been a long time in the making, and we are excited to help Orange County residents with their Trust and Will disputes. The new address is 19800 MacArthur Blvd, Ste 300, Irvine, California, and the number is 949-608-0040.
At the same time, Gian is also overseeing our expansion into Los Angeles, with office space in Downtown Los Angeles just a stone’s throw from the L.A. courthouse where all probate matters County-wide are heard. We currently have quite a few cases pending in Los Angeles County Superior Court and our new Los Angeles location will help us better assist L.A. based clients. Our L.A. office address is 633 W. 5th Street, 26th Fl, Los Angeles, California, and the number is 213-670-7940.
While we are at it, we have also opened a new location in the heart of the Financial District in Downtown San Francisco. With help from partner Heather Côté, we will be able to help clients in the City of San Francisco. Our new San Francisco office is located at One Market, Ste 3600, San Francisco, California, and the number is 415-685-0909.
Wherever you are located throughout the State of California, we have an office to serve you. If you need some advise about a Trust or Will matter, feel free to call us.
The law of no-contest clauses in California has steadily eroded over the past decade. With each change in the law, no-contest clauses become less applicable to beneficiaries. In this video, partner Keith Davidson describes the affect of no-contest clauses on your beneficial interests.
In California, due the rules of civil procedure apply to probate matters? The short answer is yes. Under California Probate Code section 1000, the Code of Civil Procedure applies to all probate matters to the extent the Probate Code does not provide an alternative procedure. Specifically, the code states:
Except to the extent that this code provides applicable rules, the rules of practice applicable to civil actions, including discovery proceedings and proceedings under Title 3a (commencing with Section 391) of Part 2 of the Code of Civil Procedure, apply to, and constitute the rules of practice in, proceedings under this code. All issues of fact joined in probate proceedings shall be tried in conformity with the rules of practice in civil actions.
This allows you to use all types of discovery techniques when litigating a Trust or Will matter. For example, you can request documents, ask written questions, request admissions, take depositions, and subpoena documents from third-party witnesses. It really is no different from the techniques used in a regular civil lawsuit.
You also have civil motions at your disposal, things like demurrers, motions to strike, motions for judgment on the pleadings, and motions for summary judgment. You may not necessarily win any of these motions, but they can be brought in a probate court matter.
Unless, of course, your assigned probate judge disagrees with their use. Unfortunately, there are a few probate court judges out there who disfavor the use of things like demurrers and motions for summary judgment, event though the California Probate Code specifically authorizes their use. And since judges have wide latitude in handling the procedural part of any lawsuit, they have discretion to allow or disallow such a filing. But a majority of probate court judges will allow civil motions and other types of civil filings, which allow you to handle a probate matter similarly to how any other civil lawsuit is managed.
So don’t wait when you have a trust or will lawsuit; start your discovery and get some answers!
In California, Trustees are required to give notice when a Trust becomes irrevocable or there is a change of Trustee. But few Trustees know they have to do this, and many beneficiaries do not fully understand what action must be taken once notice is received. Find out more in this video on Trustee notice.
Whoa, slow down, that’s a loaded question. Filing a lawsuit is easy, right? You just draw up a few papers, file them with the Court, and get what you want in a few days…actually, no. It’s not like that AT ALL. In fact, most Trust and Will lawsuits take some time to plan out, draft and file with the Court; but why is that?
First, you should know that the law is not black and white. And the law is never applied in a vacuum, instead law must be applied to a set of facts. The problem is that all the facts and evidence cannot be fully known when you are first drafting a Trust or Will lawsuit because you just don’t have time to uncover the entire truth. So you work with what you know and you put the facts together as best you can. Those facts then need to be blended with the law to come up with your legal arguments in the final draft of your lawsuit that is filed with the Court. Bottom line: this takes time. To have a good filing, you need to put in the time and effort to make it so.
Second, successful lawyers are already busy with other cases. So while you Trust and Will lawsuit is undoubtedly important, we lawyers need to make time to fit it into our schedules. Not always easy, but doable with some patience and work. Bottom line: it may take a day or two to get started on your Trust or Will lawsuit.
Third, you are the final (and most important) editor of your lawsuit filing. Yes, you, the client, play an important role in preparing a Trust or Will lawsuit for filing. You are the one with knowledge of the facts, the past, the history, the backstory—call it what you will, you matter. And people are different, some prefer a great degree of detail while others prefer a general overview. No one way is right, both have their advantages and disadvantages. But as a client, you have the right (maybe even the obligation) to review and edit the court filing your lawyers prepare. Your input is vital, but your input can also take time. Time for you to review and comment, time for the lawyers to input your changes or discuss your comments with you, and time to blend this all together into the best possible court filing you can have. Remember, your court filing need not be perfect, but it should be as good as we can make it with the time we have. Bottom line: your input matters, but it also adds time to the process.
So exactly how long should it take to prepare and filing the opening filing for you Trust or Will lawsuit? Typically about two weeks or so. Sometimes less, sometimes more. If you are well beyond two weeks, then something may be amiss.
If a person promises to leave you assets in exchange for you taking care of them, you may have an enforceable contract to make a Will a California. Find out more about your right to enforce an agreement to give property in this video.
A loved one dies, you find out you are disinherited, and you are left to wonder: what happened before he died that caused a drastic change in his Trust or Will? The one person who could tell you the answer to that question is gone, so it’s now up to you to find the answer from a variety of sources, including the attorney who drafted the Trust or Will.
The problem is that many attorneys will claim the Attorney-Client Privilege applies to their conversation with the decedent and refuse to divulge the information you need for your Trust or Will lawsuit.
That’s where the California Evidence Code steps in to help you obtain the answers you need to know. Using the following four Evidence Code sections you can get all the information you need to figure out what went wrong with your inheritance:
1. Evidence Code 957
What the law says:
There is no privilege under this article as to a communication relevant to an issue between parties all of whom claim through a deceased client, regardless of whether the claims are by testate or intestate succession, nonprobate transfer, or inter vivos transaction.
What it means:
If you are claiming a right through a deceased person, you have the right to question the drafting attorney and the Attorney-Client Privilege does not apply. This is true whether you are questioning a Will, and Trust, or any other type of at-death transfer device.
2. Evidence Code 959
What the law says:
There is no privilege under this article as to a communication relevant to an issue concerning the intention or competence of a client executing an attested document of which the lawyer is an attesting witness, or concerning the execution or attestation of such a document.
What it means:
Where a lawyer has witnessed a Will, or knows of the intent and possible competency of a client, then you are entitled to ask questions about the lawyer’s knowledge of that intent or competency. If you look at most Wills, it specifically states in the witness section that the witnesses are attesting to the fact that the decedent did not lack capacity. When a lawyer signs something like this, it stands to reason that they should answer questions about it and cannot hide behind the Attorney-Client Privilege.
3. Evidence Code Section 960
What the law says:
There is no privilege under this article as to a communication relevant to an issue concerning the intention of a client, now deceased, with respect to a deed of conveyance, will, or other writing, executed by the client, purporting to affect an interest in property.
What it means:
Where an attorney and a client discuss the client’s intentions in transferring property, there is no Attorney-Client Privilege covering that conversation once the client is deceased. Again, the law wants to get to the bottom of the client’s intent and so the law cares out an exception to the Attorney-Client Privilege to do so.
4. Evidence Code Section 1260
What the law says:
(a) Except as provided in subdivision (b), evidence of any of the following statements made by a declarant who is unavailable as a witness is not made inadmissible by the hearsay rule:
(1) That the declarant has or has not made a will or established or amended a revocable trust.
(2) That the declarant has or has not revoked his or her will, revocable trust, or an amendment to a revocable trust.
(3) That identifies the declarant’s will, revocable trust, or an amendment to a revocable trust.
(b) Evidence of a statement is inadmissible under this section if the statement was made under circumstances that indicate its lack of trustworthiness.
What it means:
This is not an exception to the Attorney-Client Privilege, but rather an exception to the hearsay rule that allows a decedent’s statements to be admitted into evidence even though they are not present to testify in court (which would normally be hearsay). There is an exception if the information is not trustworthy, which the court has great discretion to determine at time of trial.
By the way, just because these rules apply does not mean that every lawyer follows them (I know, big surprise). We have plenty of cases where we sit down to depose and question the drafting attorney and they wrongly assert the Attorney-Client Privilege. That requires us to go to court on a motion to compel them to answer the questions asked. So don’t be surprised if you have to fight for this information, but with these Evidence Code sections, you have an excellent chance at winning that fight.